Our target price is HK$33, based on 6.5x FY26E P/S, +1STD to mean since 2022. We use a P/S valuation approach due to East Buy's transformation stage and membership model evolution. We believe this approach is justified as: 1) the shift from livestreaming MCN to membership platform warrants premium valuation multiples; 2) P/S valuation better captures the company's revenue growth potential, especially as app contribution rises from 18% toward 30%+ target. We assign a 23% premium to the historical average of 5.3x, justified by: 1) structural margin expansion path from current 4% adjusted NPM to 7-8% by FY27E; 2) proven execution with 264k members and validated post-Dong transition; 3) tier 3-5 city penetration opportunity where quality retail options are limited; and 4) accelerating app monetization with improving private-label mix driving higher margins.

Key downside risks that could prevent the shares from reaching our target price include: 1) High concentration on Douyin, which contributes the majority of GMV; 2) "Online Sam's Club" positioning is unproven at scale - 264.3k members vs. Sam's Club in China with over millions; 3) High P/S ratio would suggest that significant execution success is already priced in, limiting the margin for error. Upside risks include: 1) App scaling to management's 500k-1mn member target could drive RMB 2.5-5bn incremental GMV, significantly above our estimates; 2) Net margin reaching the upper end of a 5-10% target could drive significant earnings upside; 3) Successful penetration of New Oriental's 10mn+ parent base (currently single-digit penetrated) represents a material untapped opportunity.